Survey says lawyers receptive to litigation funding
Some say that it could potentially lead to a higher frequency of frivolous suits or conflicts of interest, but one such investor recently set out to determine what the attitudes looked like in arguably the most relevant demographic: lawyers.
January 16, 2014 at 05:31 AM
2 minute read
The original version of this story was published on Law.com
The practice of litigation financing—using investor money to fund potentially lucrative legal action– while common in U.K. and Australian courtrooms, has historically been subject to restriction in the United Sates. But that doesn't mean it's not happening. Often the practice goes on behind the scenes in U.S. courts, only coming to light when contested by a courtroom opponent. Attitudes towards the process are lightening, however, and now a number of states are allowing it out in the open.
While opponents of litigation financing say that it could potentially lead to a higher frequency of frivolous suits or conflicts of interest, one such investor recently set out to determine what the attitudes looked like in arguably the most relevant demographic: lawyers.
Burford Capital's Second Annual Survey measured the attitudes of practicing lawyers both from firms and legal departments and found that in line with regulatory restrictions, lawyers have also warmed to the potential use of litigation financing.
The poll aggregated the thoughts of 313 outside counsel, 74 in-house lawyers and 45 corporate financial executives late in 2013, hoping to capture both their familiarity with the litigation funding and their feelings towards it.
The information provided showed a sharp increase in the number of lawyers who said that they think litigation finance was a useful tool. Around 79 percent of respondents agreed with that statement, up about 15 percent from the previous poll.
Christopher Bogart, CEO of Burford Capital, said in a release following the study's release “Our survey results this year reinforce the significant market need for litigation finance. The practice of litigation finance offers a solution to the increasing expense of litigation for clients, and allows good cases to get to great firms – firms whose chosen business models don't allow for a significant number of full contingency fee cases.”
While there may be fears that litigation investors might seek to manipulate case outcomes, the monumental costs associated could make the prospect of outsider money attractive for practicing lawyers.
For more on litigation financing check out these stories:
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